French budget minister faces tax evasion allegations

Waterloo Region Record

PARIS — French prosecutors opened a preliminary investigation Tuesday into accusations that Budget Minister Jerome Cahuzac earlier in his career had a secret Swiss bank account to avoid France’s high taxes.

The announcement that an investigation was being launched, from the Paris prosecutor’s office, was described as an attempt to get to the bottom of the reports from the investigative Web site Mediapart, and not as an indication that authorities have their own reasons to suspect Cahuzac might be guilty of tax evasion.

Nevertheless, the judicial inquiry was considered an embarrassment for President Francois Hollande’s Socialist government, which has been criticized heavily by the conservative opposition for enacting stiff tax increases since taking over in May. Cahuzac, as budget minister, has carried the main responsibility for tax policy and has taken the lead in defending the tax increases before the National Assembly.

The tax rate has caused particular controversy in recent days because of a decision by French actor Gerard Depardieu to renounce his citizenship and move abroad to escape what he called an unreasonable fiscal policy by Hollande’s government. With much fanfare, Depardieu was handed a Russian passport Saturday by President Vladimir Putin in what was interpreted here as a deliberate jab at France by the Russian leader.

Mediapart reported in December that Cahuzac had an account at USB bank in Switzerland during the early 1990s, but that he had closed the account in 2010, well before he became minister. The money in the account, Mediapart said, was transferred through a complicated financial arrangement to another offshore account, this one in Singapore, where it presumably escaped scrutiny from French tax collectors.

Cahuzac, a well-to-do physician, from the outset vehemently denied the reports, solemnly telling the National Assembly that he never had any accounts in foreign banks. Prime Minister Jean-Marc Ayrault expressed support and has kept him on the job.

Mediapart followed up by releasing a recorded telephone conversation in which, the site said, Cahuzac refers to a USB account in Switzerland as a potential problem. But Cahuzac countered that the voice was not his.

“Given this situation, the facts denounced by Mediapart that could receive a penal qualification, and the denials by Mr. Jerome Cahuzac, it is up to the Paris prosecutor of the republic, in conformity with the law, to proceed without delay with verifications related to the reality and the content of the recording as well as all hearings necessary to bring out the truth,” the prosecutor declared in a statement.

Cahuzac’s office released a statement professing satisfaction with the prosecutor’s decision, saying the investigation will “demonstrate his complete innocence of the absurd accusations against him.”